Cantwell Floor Statement on Puerto Rico

December 10, 2015

Watch Sen. Cantwell's floor speech here.

"Mr. President, I thank the senator from Indiana for his great remarks. Thank you for making them today.

"I come to the floor tonight to discuss Puerto Rico, a territory of the United States since 1898, millions of residents who have been citizens since 1917, nearly 100 years. This community of 3.5 million people is facing an economic crisis, fiscal and liquidity problems, and what are we doing about it here in Congress? We’re not doing anything. That needs to change. And it needs to change now.

"We spent ten years watching Puerto Rico suffer through a recession. We spent months here in Congress discussing what to do. There were a lot of ideas – some popular, some controversial—and I can say as the ranking member on the Energy Committee, I’ve heard many ideas, but now is the time to act.

"We need to allow Puerto Rico to restructure. That is, we need to give them the same opportunities we give to average American citizens and municipalities to restructure their debt. The same that we gave to to Wall Street when they were in a financial crisis – the same brink that we were almost on in our own economic problems. But yet there are some here in the halls of Congress that would rather listen to hedge funds and make sure that they are prioritized in a debt restructuring than actually putting in place debt restructuring.

"I propose a two-part, no-cost approach that will be most effective and least controversial to help us out of this situation.

"The Energy and Natural Resources Committee, which has jurisdiction over territories, has heard from experts from the Department of Treasury, other government officials about how dire this situation is now. Just yesterday a group of six CEOs sent a letter to the congressional leaders urging swift legislative action on the Puerto Rico situation.

"I can tell my colleagues the whole issue of what to do about Puerto Rico long term has many divergent views, but all those divergent views in Puerto Rico are singing the same tune right now —restructure before January 1 or they will face serious issues of default.

"Why do we care? We care because the U.S. government will have an impact of between $1 billion and $2 billion of more service demands, if we do not allow them to restructure. This year the government and the electric utilities failed to make their debt payments. Government workers are being cut to three days a week. Patients are now waiting months for basic medical care. Hospitals are going bankrupt. The health care industry is threatened by a complete collapse. Forty-five percent of the population is living in poverty, including 58 percent of them who are children and the unemployment rate is stuck at 12.2 percent, more than double the highest state's unemployment rate.

"So what does this cost us, again, to act here in the United States? It costs the U.S. taxpayers zero. It costs us zero because if you think about it, this is about debt restructuring. This is about setting up a process which they are denied just because Puerto Rico is a territory; they cannot get the relief of restructuring. They tried. They tried to pass their own bankruptcy law. They tried and then basically were told that it didn't meet a federal standard.

"They’re not like a municipality that has this authority. They are a territory. They are our territory. If we want them to restructure more successfully and keep more debt from coming to the shores of the United States because of -- I would say that we had a huge increase in population. So the cost of inaction is this acceleration of the Puerto Rico population coming to the United States.

"In 2014, we see the number upped to almost 70,000 people in one year. The net migration has been more than 500 percent in the last 10 years. So, if we do nothing in the next week and don't act on this problem, more migration of Puerto Ricans are going to come to the United States. And when they come, what will happen? Well, they will be demanding more services: Head Start, public housing, unemployment insurance, Pell grants. So default equals more federal spending.

"The notion that my colleagues think that somehow this inaction is the way out of this equation, they are just adding more responsibility to the U.S. taxpayer. Why? Is it because they want to protect hedge funds in a bankruptcy process? They want to decide here in the halls of the United States Congress who gets in line first and who gets paid?

"I will remind my colleagues, particularly because the presiding officer knows the Deepwater Horizon issue very well, we did not make decisions here in the United States Congress – neither in the Senate nor the House of Representatives—who would get paid after the Deepwater Horizon implosion. We appointed a receiver. They made the tough decisions. When it came to Detroit’s bankruptcy, we did not make the decisions.

"I guarantee you that of 100 members of the United States Senate, there were probably 100 opinions in both of those cases how we thought each of those payments or restructuring should be done.

"But we're not the experts. And just because we have an opinion about what we would like to see Puerto Rico do, doesn't mean that we should be writing that into legislation and prejudging what should be an official, legal process of restructuring debt that we need to give Puerto Rico the authority to have.

"This is what newspapers across the United States are saying including – the Los Angeles Times, the Miami Herald, the Boston Globe, the New York Times and others – give Puerto Rico the ability to restructure their debt.

"So why are people here failing to take up this mantle? People have been arguing for months about different ideas. Some of our colleagues want to increase the Medicaid reimbursement rate. Some of our colleagues want to have an EITC increase. Some of our colleagues want Puerto Rico to do away with their pensions before they go into a bankruptcy structure. Those are all political opinions by individuals that one could say are worth debate.

"But now we are at the point of default just as we need to make decisions before January 1, our colleagues are now trying to say that we can continue to discuss this issue. We don't have time to continue to discuss this issue. We have next week, and as a member of the Energy and Natural Resources Committee, and, as a committee that oversees territories, I feel it is our responsibility to propose a policy and get it in place so that we can find some resolution of this issue.

"I think this two-part fix about making sure that there is the ability to restructure and a council to oversee it in coordination with Treasury is the best that we can do at this point in time, to save the U.S. government from further costs and to give relief to Puerto Rico.

"The notion that people here in the United States House of Representatives or Senate are trying to protect hedge funds so that they can maximize their return is despicable. It is despicable. The notion that somebody is trying to protect these fundamental questions that need to be decided in a formal process of bankruptcy or reform, as we're calling it within the territory, is the fear and even process that should take place without prejudice.

"We are going to, as a body, have a very robust discussion—I guarantee you—for years and years and years to come about what the United States is going to do about the territory of Puerto Rico. Let's at least give ourselves the luxury of having that discussion when the territory is not in default. Let's come together and pass some legislation for them to restructure their debt. Let a professional organization take the politics out of this and make the best financial decisions that can be made now to save the U.S. taxpayer from further expense. I thank the president. And I yield the floor."

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